An asset protection strategy is designed to safeguard your assets from unexpected threats. Often times this is an afterthought or not even considered because someone feels that they do not own enough assets to consider such options. However, an asset protection strategy is a good idea to discuss with a reliable estate law attorney who can advise on the best asset protection strategies for you.
Common Types of Asset Protection Strategies
- Liability insurance, such as an umbrella coverage policy, that can be added to your homeowner’s policy.
- Dividing assets between spouses can provide one with sole ownership over some investments and other assets while you keep only essential assets, such as income, in your name. Creditors, in general, can only attempt to recover or lien assets in your name.
- Business entities can hold and add valuable asset protection to your estate.
Business entities can shield your personal and business assets from creditors. It separates the two assets from any potential liabilities that might arise.
- Establishing trusts can provide asset protection if those trusts are set in a way in which they are The terms of a trust are critical and vary with its benefits and drawbacks. Asset protection trust options must be tailored to an individual’s specific situation and needs. These include:
- Spendthrift Trusts
- Discretionary Trusts
- Support trusts
- Blend Trusts
- Personal Trusts
- Self-settled Trusts
- Medicaid planning Trust
- Lifetime QTIP Trust
- Spousal Lifetime Access Trust
- Domestic Asset Protection Trust
- Irrevocable Life Insurance Trusts
- Standalone Retirement Trusts
Benefits of a Professional Asset Protection Strategy
To fully protect your estate, a detailed asset protection strategy needs to be in place before any potential situation arises with creditors. You must take into account state law when considering the best asset protection strategy and keep in mind that states allow tactics that are sometimes aggressive in order for creditors to obtain assets.
With any asset protection strategy, a local wills, trust and estates attorney is necessary to structure the plan and help determine the level of assets to be protected.
The ultimate goal of asset protection is to provide lifetime security and peace of mind knowing that you cannot lose what you own. The best asset protection plan will discourage lawsuits, remove the potential for someone to seize your wealth, reduce insurance costs, and most importantly protect your assets and safeguard your estate.